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Port Trucking Providers To Share Responsibility For Labor Violations With Retail Companies

Posted by Jeffrey Forbes on Oct 25, 2018 9:00:00 AM

port trucking providers labor violations retail companies

Labor issues have been causing headaches in the trucking industry for a long time.  The industry seems perpetually short of qualified drivers.  Ensuring drivers stay compliant with applicable rules on driving times and record-keeping presents a different set of challenges.  On top of that, some companies have caused problems by violating labor laws, refusing to pay labor judgments, and thus undercutting their competition.

Labor Violations Found In The Ports of California

Now, California is trying to introduce a new wrinkle into these sets of problems.  The state just passed a law aimed at making big retail stores such as Target and Walmart liable for the violations of truckers and trucking companies they hire.  The law follows a long investigation by USA Today that found significant abuses occurring at trucking companies operating out of the Port of Los Angeles and Port of Long Beach.  The investigation found that these companies faced large judgments against them for labor violations but consistently avoided paying the judgments by shutting down and opening up under a new name.  The judgments relate to unpaid wages, taxes, and workers compensation liabilities. 

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Legislation Finds Support From Retailers and Owner-Operator Independent Drivers Association

The legislation specifically applies to port trucking companies.  It would create a backlist of trucking companies who have failed to pay final judgments.  Any retailer working with a company on the backlist would become jointly liable for future labor violations.  The bill aims to make it easier for retailers to know and make informed decisions about the companies with whom they do business rather than farming it out to an endless series of subcontractors.  The bill has the support of several large retailers in the state as well as of the Owner-Operator Independent Drivers Association.

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Other States Expected To Follow CA's Lead

California often leads the way in aggressive legislation such as this.  Their moves to enforce joint liability on co-employers have been emulated by other states.  To that end, retailers and trucking companies should be keeping their eyes on this law and how it proceeds.  A successful roll-out might lead to several other states with large ports – particularly New York and New Jersey – passing similar legislation. 

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Advice For Trucking Companies

Ultimately, companies that comply with existing labor laws and pay their legal judgments should have little to fear from this new legislation.  The new law should help make them more competitive by ensuring everyone is playing by the same rules.  Still, it highlights the needs for companies to make sure they have adequate compliance policies.  Violations of labor law or trucking regulations are only getting more expensive as time passes, and the costs to a company via damaged reputation and lost business resulting from a repeated pattern of violations only exacerbate the problem. 

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Topics: Trucking & Logistics, For Your Business, Wage And Hour, Risks For Businesses, Risks In The Trucking Industry, Managing Workers in Trucking, Laws for Employers